Executive Summary: Why the U.S. Must Re-Engage in Latin America

About the Author

Despite the widespread adoption of
democratic elections and civilian rule, and despite the development
of nascent market economies, Latin America is less stable and
prosperous than it was 10 years ago. If the Bush Administration
wants to help alleviate some the problems in the Western Hemisphere
before they demand attention as the Middle East does, it must begin
to support deeper reforms, update its security policy, and better
articulate its interests in the region.

Reforms on
HoldToday, all of the countries in the hemisphere hold
competitive elections except Cuba and Haiti, and most have at least
tried to adopt market economic principles. But elections alone have
failed to provide checks and balances. Half of the region remains
plagued by laws that block competition, leaders that misuse public
funds, and inadequate guarantees of property rights, and the lack
of authority in vast rural areas makes Latin America attractive to
smugglers and terrorists.

Potential
Flashpoints In July 2000, Mexico elected its first opposition party
president in 71 years, but a Congress mostly opposed to him
complicates prospects of enacting reforms. High taxes, regulations
that favor existing monopolies, lack of affordable credit, and an
inefficient energy sector contribute to unemployment and worker
migrations to the United States.

Colombia is beginning to make progress
against rural terrorist groups, but Venezuelan President Hugo
Chávez is reportedly granting haven to Colombian rebels and
international terrorists in Venezuela and is restricting civil
liberties and access to foreign exchange and increasing the risk of
civil conflict. Sagging employment has eroded the political bases
of the presidents of Bolivia, Ecuador, and Peru. Central America is
threatened by rising crime and the possible return of populist
dictators. Brazil and Argentina remain on the edge of financial
default, and repressive regimes in Cuba and Haiti are poised to
send more refugees to the U.S.

Diverted
AttentionThe Bush Administration has recovered momentum on
liberalizing hemispheric trade relations and provided more
comprehensive support for Colombia's war on drug trafficking and
terrorist groups. Last year, Congress granted President George W.
Bush trade promotion authority, enabling him to sign into law a
bilateral free trade agreement with Chile. But distracted by the
war on terrorism in the Middle East, the Administration took two
and a half years to assemble its Latin America team, leaving
Congress and the foreign affairs bureaucracy to manage hemispheric
issues almost as they had under the previous Administration.

Support for ongoing political and economic
reforms has no clear priority among a range of foreign assistance
programs and uncertain conditions for backing loans to countries
from multilateral lending institutions. Coordination on assistance
is sometimes lacking between the Administration and U.S. overseas
missions, as well as among U.S. federal agencies. Public diplomacy
and foreign broadcasting have not been integrated into reform
promotion strategies.

Washington's hemispheric defense approach
is still based on military assistance programs that donate
equipment, fund exercises, and provide conventional military
training. Counternarcotics and counterterrorism, which require
unconventional military and civilian cooperation, are the major
security concerns. Finally, the Administration has been reluctant
to criticize poor governance and economies supported by
unsustainable debt.

Re-Energizing
EngagementTo guard against a rollback of governance and market
reforms and encourage renewed progress, the Bush Administration
should:

Retake the lead
in developing U.S.-Latin America policy by giving the
Assistant Secretary of State for Western Hemisphere Affairs
authority to formulate plans, set priorities, enhance interagency
coordination, and communicate needs to Congress.

Reorder
priorities. Mexico--America's closest neighbor and second
largest trading partner--should be at the top of the U.S.
legislative agenda. Next should be Colombia, whose drug traffickers
and terrorist groups affect the rest of the hemisphere. Engaging
Cuban dictator Fidel Castro should be last, though supporting
Cuba's dissidents should remain important.

Improve support
for democratic governance and market reforms. Help should
go primarily to countries where it can leverage existing desires to
achieve self-sufficiency. Coordination among other agencies with
foreign affairs missions must improve, and public diplomacy and
foreign broadcasting efforts must be integrated into support
plans.

Accelerate
negotiations on free trade. New bilateral and subregional
free trade accords with the United States could help create a
virtual Free Trade Area of the Americas in anticipation of a real
agreement.

Develop a new
security strategy that confronts today's hybrid security
threats, takes advantage of the growth of fledgling democracies,
and encourages subregional partnerships based on routine
military-to-military, civilian agency-to-civilian agency
cooperation that promote common standards and protocols.

Articulate U.S.
interests in Latin America. The Administration should end
its silence on the need for local policies that will help each
country become more self-sustaining.

ConclusionWhile the Bush Administration can take credit for reviving
the hemispheric free trade agenda and enhancing counternarcotics
efforts, two and a half years have lapsed with little progress on
reforms and defense. If Washington remains passive, U.S. exporters
will face declining markets, more complicated and costly criminal
and terrorist threats, and fewer reliable allies in international
forums. Better governance, free markets, a modern strategy to
improve regional security, and clear communication of U.S.
interests are the keys to peace and prosperity.

Stephen
Johnson is Senior Policy Analyst for Latin America in the
Kathryn and Shelby Cullom Davis Institute for International Studies
at The Heritage Foundation.